Monday, 16 October 2017

Preparing for the Send-off You Want



Let’s face it – no one wants to talk about growing old. We’d much rather spend our time enjoying these present moments with family and friends than look ahead to the inevitable. But it pays to prepare for the future by discussing a plan for your passing and the financial and emotional impact that this can have on your family.

Funeral plans can be of great benefit in the planning process, but it’s helpful to know what they are and how they work. If you’re not sure about your need for a funeral plan or how to choose one, we have you covered.

What, Exactly, is a Funeral Plan?

Most funeral plans work the same way. Money is paid in advance to a funeral director to cover the cost of a ceremony, cremation, burial, or celebration of your choice, locking in today’s prices. Given funeral prices have increased tenfold over the last decade, having a funeral plan in place means there is less of a need to set aside savings for a send-off.

This planning tool gives some peace of mind to you and your family, who will be safe in the knowledge that your wishes will be honoured without breaking the bank.

There was a time when planning for a funeral was as simple as paying a set amount to your funeral director of choice. The hope was that by the time you or a loved one passed, the provider would be available to follow through with your wishes for a send-off. Unfortunately, that wasn’t always a safe bet.

Today, the idea of a pre-paid funeral plan has evolved, with protections in place like having the money kept in trust or a life assurance plan. This means that regardless of what happens with the funeral director, you can rest assured that those funds are protected and ultimately are used to fulfill your wishes.

Taking Away Financial and Emotional Stress

Locking in today’s prices for funeral costs is helpful in keeping financial stress at bay, but there is another inherent benefit to putting a funeral plan in place. Families often struggle with what their loved ones wish to take place at their funeral. Burial or cremation, a mourning or a celebration? It can be emotionally draining to discuss these details once someone has passed away.

A funeral plan allows you to detail your wishes well in advance, making life easier for your family. A call to the funeral provider sets things in motion, and the funeral plan put in place takes care of the financial aspect of it all. Family members have little to worry about when the time comes.

Differences in Plans

While funeral plans play an important role in your overall financial planning, not all plans are created equal. There are countless plan options, features, and providers willing to take on the task of creating and delivering the send-off you want, and it can be difficult to know which is most appropriate for you and your family.

First, be sure to understand what’s covered in the plan. Some options lock in the cost of a funeral director’s services but may include expenses for burial, third-party vendors, or special requests that increase over time. Funeral plans could also have exclusions that limit the distance the funeral director will travel or where the burial site may be.

Additionally, it is important to select a plan from a qualified provider. Funeral plan companies should be part of the self-regulatory Funeral Planning Authority which encourages compliance with a code of practice.

If you’re unsure where to start with this search, get in touch with Peter Brown from Best Funeral Plans - let him know you’ve come via Jones Hill .

Email: peter@bestfuneralplans.co.uk
Direct Dial: 02381 920168
Mobile: 07719 819240
www.bestfuneralplans.co.uk

We know talking about death is not an enjoyable task, but getting the right plan in place helps takes away the worry for you and your family.


Monday, 25 September 2017

Managing our Finances as we get Older


Maintaining control over money is one of the most powerful ways to keep a firm grip on independence as we get older. But it isn’t always an easy task when it involves the people we love. With age comes a handful of issues relating to a decline in money management skills for older individuals that should be handled with a degree of compassion and knowledge.

If you’re concerned about the financial health of an aging loved one in the future, read on. Here we will discuss what you need to know about declining financial capabilities, and steps you can take to prepare.

Understanding the Risks

There are several reasons why the elderly encounter financial challenges later in life. The loss of their spouse is the most common, especially when that person kept track of most of the finances in the household. From covering monthly expenses to making decisions regarding investments and pensions, losing a spouse can make it incredibly difficult to stay on track with financial obligations and goals.

Another pressing issue among older individuals is the prevalence of declining cognitive function, including Alzheimer’s and dementia. The loss of short-term memory can quickly lead to financial woes, putting parents or loved ones in a less than ideal financial situation. As there is no cure for dementia or Alzheimer’s at this time, this is likely to be an ongoing concern for families today and in the future.

Being widowed or living with short-term memory loss is difficult enough, but recent studies have shown another major risk to the elderly. The changes to pension schemes making funds more accessible have been beneficial to many gearing up for retirement – unfortunately, there has also been an increase in pension scams, particularly targeted towards elderly individuals.
Research shows that single people over the age of 75 are at the greatest risk of responding to pension scams, with more than one-quarter getting stung. This fraud can deplete retirement savings completely, leaving your parents or older relative without the money they need to get by.

Knowing the Warning Signs

Protecting your older family members from financial decline begins with recognising the warning signs. Here are a few that may raise a red flag:

  • - Taking more time than usual to complete routine financial tasks: this could be paying bills late, being slow to request a necessary withdrawal from an account, or avoiding making decisions on investments

  • - Being unable to grasp financial concepts: not understanding the how or why of budgeting or confusing one type of account with another

  • - Poor attention to detail: being unable to give specifics about an account balance or cash flow, not seeing the risk involved in an investment vehicle, or failing to provide information about where accounts are held all represent warning signs

Any one of these issues can have a grave impact on your loved one’s financial circumstances, and that makes it important to know how you can prepare in advance.

Strategies to Manage the Situation

Recognising that there may be a need for you to step in and help manage your parent’s or relative’s financial matters down the road may seem straightforward, but it often isn’t easy. There’s the “been there, done that” mentality, along with a heavy dose of pride among the elderly.

It’s important to approach the topic with compassion and understanding of how they are most likely feeling about their potentially changing circumstances. Here’s how to do that when the time comes.

Securing a lasting power of attorney is a necessary step in helping a loved one manage their finances. This document gives you the ability to act on their behalf, but when it isn’t in place in advance, there can be costly consequences. Without a lasting power of attorney, you would need to get the courts involved in gaining permission to manage financial affairs – an added emotional and financial drain that can be avoided.

But a lasting power of attorney isn’t the only planning tool to use with an aging loved one.

Setting up periodic financial meetings with your parents or relative to keep them on track is just as helpful. During those meetings, ask simple questions about monthly expenses and how they are paid, if their income is covering their costs, and if they’re working with anyone to help manage their money. This helps uncover any changes that might present a problem in the future and gives you ample time to discuss them openly and honestly.

Before the time comes to take over financial decisions of a parent or loved one, it may be more comfortable – for you and them – to work with a trusted adviser well in advance. It’s a big task to manage the finances of someone else, no matter how much you care for them, and most do not have the time or experience to do so. Enlisting the help of a STEP qualified adviser takes the burden off your shoulders, and offers peace of mind to your parents or ageing relative.

Helping an aging parent or relative manage their finances isn’t always a walk in the park. But it is far more challenging, both emotionally and logistically, when you try to correct issues after the fact. If you want to prepare ahead of time, take note of the strategies above or get in touch with us today for more guidance.

As an exclusive offer for friends, family, and colleagues of our valued clients, we provide a Second Opinion Service to help the ones you care about understand their financial situations better. If you know someone who would benefit from this second opinion service, feel free to pass this information onto them directly.


Friday, 8 September 2017

Doing It for the Kids



Financial education, that is! Discussing money is a big taboo in many families and, frankly, it’s uncomfortable. But having “the talk” with children about money management is crucial to their success in life – and yours as a parent.

If there was ever a time to be open and honest about how to manage finances, it’s before your youngsters get off to university. Not sure how to have that discussion? Here’s how to get started with the ‘money management’ conversation and tips for making sure it sticks.

Remember Your Golden Youth?

No, really. Think back to being your child’s age. It’s likely money wasn’t a thought in your mind when you were taking your first steps into adulthood. Like you back then, kids on their way to university these days are experiencing a lot for the first time, including leaving the comfort of having their life managed for them.

They’ve never had a reason to budget… Until now!

To spark the conversation about money with your soon-to-be university student, consider what you needed in terms of financial guidance way back when. Was it a framework for managing money on a day to day basis? Or maybe ideas for how to develop and stick with a budget?

Remember your child is new to this adulting thing and will need (and maybe even appreciate, eventually) what you can teach them before they fly the coop.

Providing the Right Tools

Before your child runs off to university, take the time to draw up a budget with them. You can easily start by using this spreadsheet to break down spending categories in simple terms. Then fill in the appropriate amounts to fit their needs. Don’t forget to talk them through why it's important to keep track of where the money is going each month.

But kids these days may turn up their nose at an “old-school” spreadsheet. In fact, unless it’s accessible on their smartphone, will they even bother?. To make sure they’re actually following your guidance, you could suggest an app like Monzo. It serves the same budgeting purpose, just with a fancier, tech-driven twist.

Budgeting education and tools are a great place to start, but don’t let those do all the heavy lifting. Your student will need coaching along the way, and possibly some direction when things don’t go as planned. And that will certainly happen. Set a date to look over the budget every few months.

Pro Tip - your new university student is likely to be much more receptive to this type of discussion one month before they receive their termly student loan.

Think Past the Budget

Creating and sticking to a budget is a must for university student money management, but there are other things you can do to help your child save here and there.

Student Council Tax discounts may mean there’s no need to pay council tax, so long as students live with other students. It’s automatic for students living in halls of residence but could apply to students in private housing arrangements, too.

And while it shouldn’t be a go-to tool, student overdraft protection is helpful. Many banks offer student accounts that include a 0% overdraft service all the time that they are a student. Having this in place could save quite a few hefty unauthorised overdraft fees.

Getting through the talk about money with your child doesn’t have to be a drag. Focus on putting yourself in their trendy shoes, and give them the guidance, tech and encouragement that you needed when you were their age.

Having a hard time getting the conversation started? We’ve helped a number of clients help plan for their children’s university recently - we’re happy to extend this offer to OnTrack clients free of charge.

Sunday, 27 August 2017

The 3 Biggest Mistakes Ex-Military Service Personnel Make with their Money

In a perfect world, financial planning would be a breeze no matter what stage of life we are in. The hard truth is that for most, avoiding money pitfalls is easier said than done. Here are the 3 biggest mistakes ex-military personnel make - and how to avoid them!

Mistake 1: Failing to Take an Active Role

Whilst you’re in the military, there are fewer active money decisions that need to be made. Pension contributions and life insurance, for example, are taken care of for you, without much if any input needed by you.

But once you’re in the civvie street, you have to take a more active role in arranging your finances.

Quite a bit more decision-making is necessary after military service, especially when it comes to your workplace benefits package. For example, many employer pension plans will match your contributions up to a limit, but often the employer’s default option is not the maximum available.

Tip - make sure to contact your employer’s HR or Payroll department and find out what the maximum matched contribution is. 

A second area is life insurance. Many larger employers either provide life insurance as a core part of their benefits package or it is available as an add-on. But the problem is that most employees don’t sign up for the benefit, or don’t pay the very small premium to get comprehensive life insurance.

Tip - contact your employer and find out if they provide employees with a ‘Death in Service’ benefit and what the cost is to increase it, if you need to.

Mistake 2: Avoiding Basic Financial Skills

Countless life skills are developed during military service, but financial management isn’t always one. Part of that is because some of the big ticket items are provided for you, like your housing, food, and travel costs. There simply isn’t the time or need to create a personal finance budget or dive into money management strategies.

In the civvie street, that just isn’t the case!

Instead of avoiding these basic financial skills altogether, ex-military can do themselves a favour by getting to know how these tools work to their benefit. For instance, a budgeting app or an excel spreadsheet can be your best friend in getting a handle on your money each month.

Keep it simple by dividing expenses into basics, leisure, luxury, and milestone categories.  Be clear about the income you have at your disposal each month. From there, you can determine what’s left to spend and save.

Tip - download a budgeting app to hold you accountable and keep you on track, top recommendation: YouNeedABudget.

Mistake 3: Not Having a Plan

Planning, strategy, implementation. This is the bread and butter of the military, but it’s amazing how often we forget all the best laid plans when we are taken out of the environment. It’s not uncommon for ex-military personnel I meet to tell me about the change of structure and organisation in their personal lives that they had in their military lives.

Creating a plan with a trusted partner not only gives you an understanding of what where you are, and where you’re heading, but it provides you with detailed next steps and contingency plan. Without a plan, there is no real way to know if the steps you are taking are helpful or harmful to your bigger financial picture.

Tip - take a piece of paper, and write down what you want to achieve, personally and professionally, within the next 3 years. Then work out the steps to achieve them.

The old saying, "those who fail to plan, plan to fail", is painfully true when it comes to your financial life.

Transitioning out of military service does not mean you are doomed to face one of these common financial mistakes, but without taking active steps, you are likely to face these challenges. Commit to doing one thing today to sidestep these common pitfalls, no matter how big or small.

As an exclusive offer for friends, family, and colleagues of our valued clients, we provide a Second Opinion Service to help the ones you care about understand their financial situations better. If you know someone who would benefit from this second opinion service, feel free to pass this information on to them directly.

Tuesday, 22 August 2017

Are you being overcharged? Fancy saving £332 per month?

When initially taking a mortgage, many homeowners choose to take a fixed rate or tracker rate that lasts for between 2-5 years.  When these rates end, in most cases the borrowing will transfer onto the lenders ‘Standard Variable Rate’ (SVR) and for most lenders, this means the rate charged will be between 3.74% to 5.74%.  
Dave Rees, our mortgage expert, reveals how you could save up to £332 per month on your mortgage.
Typically, the rate for Standard Variable Rates are higher than those that are available if taking a new mortgage, so for most people a significant saving can be made by shopping around for an alternative.  For example, a mortgage of £200,000 with 20 years remaining would cost £1,291pcm on a typical SVR of 4.74%.  However, assuming there was equity of at least 25%, a 2 year fixed rate could be obtained at 1.44% - this would cut monthly repayments to £959pcm(*).

Alternatively, a 5 year fixed rate could be obtained for 1.69% with a £749 fee that would cut payments to £982pcm (*)  A new lender will require the property value to be confirmed and a solicitor to be involved but the lenders offering these products (and many others) would pay these costs on behalf of the applicants.

Consideration should also be given to taking a new product with the current lender as in most cases, lenders will offer borrowers competitive options as an alternative to switching to the SVR and if no additional borrowing is required, this is usually a quick/simple process with little/no additional underwriting involved.

Ideally, these options should be considered 2-3 months before the current product ends, to help ensure if changing, that the new product can start as soon as the current product ends.  For advice and guidance on product options, please contact Dave Rees on 01225 775923 (Option 2) or 07932 469797 or email at dave@davereesmortgages.co.uk

(* Products quoted correct as of August 2017)

 

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